Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Stocks ended higher on Wednesday, the first session after Eid vacation, as investors put fresh bets on sector specific shares in anticipation of quick gains.
However, the presence of investors was thin in the brokerage houses after the celebration of Eid-ul-Azha in the three days through Tuesday. That led to a 16-month-low market turnover to Tk 2.46 billion, which was also 42 per cent lower than in the previous session.
According to market analysts, investors took positions in beaten-down stocks, looking for short-term gains. Many stocks plunged to a lucrative price level due to corrections in recent weeks.
Moreover, rumors that the government would retreat from the proposed capital gain tax encouraged a section of investors to inject money in stocks.
The indices stayed upbeat throughout the session, with opportunistic investors taking positions in lucrative stocks.
The benchmark index of the Dhaka Stock Exchange (DSE) finally went up more than 43 points or 0.85 per cent to settle at 5,161 on Wednesday.
The DSEX recovered almost 87 points in the past three trading sessions after it had lost 168 points in post-budget three sessions in a row.
Buyers dominated the market on Wednesday as a section of investors sought to take positions in particular stocks that had faced significant corrections, said EBL Securities.
Square Pharma, Beacon Pharma, Renata, Kohinoor Chemicals, and Unique Hotel & Resorts were major index movers. They jointly accounted for almost a 26-point rise of the key index.
However, cautious investors remained observant in the absence of any major catalysts to counter the prevailing pessimism surrounding the market outlook, said the stockbroker.
Confident investors began picking some of their preferred stocks because they considered those cheaper now, said Md Shakil Rizvi, managing director of Shakil Rizvi Stock Ltd.
Many fundamentally-strong stocks became cheap after sharp corrections, increasing investors' appetite in buying those stocks, he said.
The possibility that the revenue authority would impose a flat tax rate of 15 per cent on capital gains instead of a varying or increasing tax rate on the basis of taxpayers' annual income also boosted investors' confidence in the market, added Mr Rizvi.
The DSE Brokers Association of Bangladesh (DBA) already conveyed its concerns over the matter to the government and urged it to delay imposing capital gain tax on individual investors for at least one year considering the gloomy situation of the equity market.
Most of the large-cap sectors showed positive performance on Wednesday. Engineering booked the highest gain of 4.43 per cent, followed by pharmaceutical, food, non-bank financial institutions, power, banking, and telecom sectors.
Pharmaceuticals, general insurance and textile sectors captured more than 40 per cent of the day's total turnover.
The DS30 index, a group of 30 prominent companies, gained more than 22 points to 1,844, while the DSES index, which represents Shariah-based companies, rose 13 points to 1,121.
A majority of the stocks saw price surge, as out of the 392 issues traded, 232 closed higher, 96 closed lower and 64 remained unchanged on the DSE trading floor.
Crystal Insurance became the most-traded stocks, with shares worth Tk 116 million changing hands, followed by Pragati Life Insurance, Fortune Shoes, Asiatic Laboratories, and Lovello-Ice-Cream.
The Chittagong Stock Exchange (CSE) also ended higher with its All Share Price Index (CASPI) rising 61 points to 14,608 and the Selective Categories Index (CSCX) gaining 38 points to 8,786.